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KKR in talks to raise India-focused credit fund

22 Aug 2012

Global buyout giant KKR is reported to be in early talks to launch an India-focused credit fund that will seek to raise between $750m and $1bn.

The fund will be KKR’s first vehicle dedicated exclusively to India and will look to capitalise on the country’s soaring interest rate and corporates need for growth capital, Reuters reported.

The firm has a history of credit investing in India through KKR India Financial Services, a non-bank financial company that funds from its own balance sheet.

The vehicle is also expected to help KKR form lending relationships with borrowers that could lead to future equity investments, the report said.

The firm has yet to begin pre-marketing and will not launch the fund until it has wrapped up fundraising for its $6bn second pan-Asia fund, the report added.

It has already received Indian regulatory approval for KKR India Alternative Credit Opportunities Fund 1, according to a filing on the regulator’s website on 14 August.

The news follows reports in May that Apollo Global Management and ICICI Venture, the private equity arm of India’s second biggest lender, are nearing a $350m interim close on a fund that will invest in distressed assets in the country.

The vehicle will buy stakes in businesses facing special or distressed situations, restructurings or are spinning off assets, and will also buy non-performing loans.

Few funds in India specialise in distressed assets, but a slowdown in economic growth is expected to create a host of investment opportunities.